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Mortgage Solution Helps Family Tackle Debt!

August 22, 2013

MonsterMortgage.ca recently assisted a family to secure the financing they required for their son’s education and to get rid of high-interest credit card debt.

While some banks weren’t willing to hear the whole story, MonsterMortgage.ca was able to properly assess their mortgage needs and find the right lender for them.

The Story

A couple purchased their dream home in 2006 for $260,000. The house was built in 1990, is a two story detached with a garage, and was appraised in late October 2012 at $330,000.

The couple’s first mortgage on their home was approximately $188,000 and they recently requested an additional $47,000 to bring their total Loan to Value (LTV) to approximately 75%. The reason for the refinance was to consolidate high-interest rate debts that they had accumulated on their credit cards and to payout a student loan for their son who is being added to the title and the mortgage.

Both husband and wife are gainfully employed and can easily prove a steady and consistent income. The clients earn approximately $90,000 in household income and have no significant judgments or collections outstanding against them.

The Property

The house belonging to these clients is located in a beautiful area near many parks, luscious greenery and essential amenities. Their home has good curb appeal and showcases a ‘pride in ownership’ in its well-kept status. There are some train tracks nearby, but not too close.

Credit Score

Unfortunately, these clients do carry vulnerable credit scores. The clients’ son has seen his credit score impacted by his student loans – as the student loans have now passed their interest relief period. The clients themselves have generally managed their credit well, but have experienced some slowness recently in paying back their credit cards due to an emergency purchase of a new furnace.

While these clients look to be in relatively healthy financial shape when it comes to their home, their existing credit card debts and the costs of their son’s student debts weigh on their mortgage solution options. Where a typical big bank might say ‘no’ to this unique financial situation, MonsterMortgage.ca was able to broker a deal with one of its 25 lenders and find a new mortgage solution that helped this family tackle their debt.

The Solution

The mortgage solution was to refinance their home so that this family could tackle their debt and increase their cash flow. The new loan amount was just shy of $250,000 which covered their mortgage, credit card debts and paying out one of the four student loans, the largest, for $45,000. This will leave three smaller balances all under $5,000 each. The son lives on the property and will be added to title and the mortgage. The final result – this mortgage solution leaves savings of over $450/month – freeing up cash-flow for the family to address their remaining debts.

With the client’s high-interest debts consolidated, more of the money that they repay will now go towards their principal – and not towards interest. Helping another family tackle their debt and putting more money in their pocket and not their bank’s.